Time Warner Telecom removed from ‘CreditWatch’

Standard & Poor’s Rating Services removed Time Warner Telecom from its ‘CreditWatch’ list Friday after nearly two months, affirming the competitive carrier’s current credit ratings.

S&P placed TWT on CreditWatch “with negative implications” on Sept. 1, 2005, citing concerns about the carrier’s prospects for repaying its debt, which stood at about $1.2 billion at the end of June. But today S&P affirmed TWT’s “B” corporate credit rating as well as the “CCC+” rating on TWT’s senior unsecure debt. At the same time, S&P lowered the rating on the carrier’s $240 million senior secured second lien floating rate notes from “B” to “CCC+.”

“The affirmation reflects our assessment that Time Warner Telecom's business risk, while still vulnerable, continues to support the current 'B' rating, given its ongoing generation of EBITDA and potential to achieve a meaningful net free cash flow positive position over the next several years as it expands its enterprise customer revenues,” S&P wrote in a statement issued Friday.

“Growth in the company's metro Ethernet services will be a particularly important component in achieving such net cash improvement,” S&P added. “We expect metro Ethernet services increasingly will be adopted by business customers over the next few years and that Time Warner Telecom's revenue levels will benefit from this service growth.”